Global ETF News Older than One Year
Classifications of Countries Based on Their Level of Development: How it is Done and How it Could be Done-IMF Working paper
February 4, 2011-- The paper analyzes how the UNDP, the World Bank, and the IMF classify countries based on their level of development. These systems are found lacking in clarity with regard to their underlying rationale.
The paper argues that a country classification system based on a transparent, data-driven methodology is preferable to one based on judgment or ad hoc rules. Such an alternative methodology is developed and used to construct classification systems using a variety of proxies for development attainment.
Source: IMF
Copper and oil prices climb on fears of supply disruption
February 4, 2011--Oil and copper prices broke this week above $100 a barrel and $10,000 a tonne respectively, amid strong demand and supply worries.
“The strength of the global economic recovery is driving commodities like base metals and energy higher and these two sectors have been the best performers during the past week,” said Ole Hansen, senior commodity analyst at Saxo Bank in Denmark.
Source: FT.com
NYSE Euronext Announces Trading Volumes for January 2011
Global Derivatives Averaged 9.0 Million Contracts per Day in January
European Derivatives Volumes Down 8% vs. Prior Year; Up 42% Sequentially
European Cash Trading Volumes Up 28%, U.S. Cash Down 12% vs. Prior Year
February 4, 2011--NYSE Euronext (NYX) today announced trading volumes for its global derivatives and cash equities exchanges for January 2011 .
Global derivatives average daily volume (“ADV”) of 9.0 million contracts traded per day in January 2011 decreased 2.7% versus the prior year, but increased 35.6% sequentially.
The decrease in global derivatives ADV versus prior year levels was driven primarily by a 7.5% decrease in European derivatives, partially offset by a 3.0% increase in U.S. equity options ADV. The strong sequential increase was driven by a 78.0% increase in European fixed income derivatives and a 29.5% increase in U.S. equity options. Cash equities ADV in January 2011 was mixed, with European cash ADV increasing 27.8% and U.S. cash trading volumes decreasing 12.2% from January 2010 levels.
Source: NYSE Euronext
Global Shocks and their Impact on Low-Income Countries: Lessons from the Global Financial Crisis-IMF Working paper
February 2, 2011-- This paper investigates the short-run effects of the 2007-09 global financial crisis on growth in (mainly non-fuel exporting) low-income countries (LICs). Four conclusions stand out. First, for many individual LICs, 2009 was not extraordinarily calamitous; however, aggregate LIC output declined sharply because LICs were unusually synchronized. Second, the growth declines are on average well explained by the decline in export demand.
Third, if the external environment facing LICs improves as forecast, their growth should rebound sharply. Finally, and contrary to received wisdom, there are few robust relationships between the cross-country growth variation and the policy and structural environment; the main exceptions are reserve coverage and labor-market flexibility.
Source: IMF
NASDAQ OMX Reports Record Fourth Quarter 2010 Results
Non-GAAP EPS of $0.55 Represents 20% Increase Over Q409 Results
February 2, 2011--The NASDAQ OMX Group, Inc. ("NASDAQ OMX®") (Nasdaq:NDAQ) reported strong results for the fourth quarter of 2010. Net income attributable to NASDAQ OMX for the fourth quarter of 2010 was $137 million, or $0.69 per diluted share, compared with $101 million, or $0.50 per diluted share, in the third quarter of 2010, and $43 million, or $0.20 per diluted share, in the fourth quarter of 2009. For the full year of 2010, net income attributable to NASDAQ OMX was $395 million, or $1.91 per diluted share.
Included in the fourth quarter of 2010 results are $9 million of expenses associated with workforce reductions, merger and strategic initiatives, and other items, offset by $36 million of benefits primarily associated with the tax impact of these items and the restructuring of certain NASDAQ OMX subsidiaries.
Source: NASDAQ OMX
Globalization, the Business Cycle, and Macroeconomic Monitoring -IMF Working paper
February 1, 2011--We propose and implement a framework for characterizing and monitoring the global business cycle. Our framework utilizes high-frequency data, allows us to account for a potentially large amount of missing observations, and is designed to facilitate the updating of global activity estimates as data are released and revisions become available. We apply the framework to the G-7 countries and study various aspects of national and global business cycles, obtaining three main results.
First, our measure of the global business cycle, the common G-7 real activity factor, explains a significant amount of cross-country variation and tracks the major global cyclical events of the past forty years. Second, the common G-7 factor and the idiosyncratic country factors play different roles at different times in shaping national economic activity. Finally, the degree of G-7 business cycle synchronization among country factors has changed over time.
view the IMF Working paper-Globalization, the Business Cycle, and Macroeconomic Monitoring
Source: IMF
Consumer Prices, OECD - Updated: 1 February 2011
February 1, 2011--Consumer prices in the OECD area rose by 2.1% in the year to December 2010, up from 1.8% in November. This pick-up in inflation was partly driven by higher energy prices which increased by 8.3% in the year to December, compared with 5.4% in November.
Food prices continued to rise at relatively high rates: 2.6% in December (compared with 2.7% in November). Excluding food and energy, consumer prices rose by 1.2 % in December, unchanged from November.
Source: OECD
BlackRock New Report * ETF Landscape: Industry Review - Year End 2010
January 31, 2011--The industry grew on all major dimensions during 2010 and we expect this to continue in 2011. With products and assets both growing by 26.6%, the global ETF industry had 2,459 ETFs with 5,554 listings and assets of US$1,311.3 Bn, from 136 providers on 46 exchanges around the world, at year end 2010. This is up significantly on 2009's year end of 1,943 ETFs with 3,827 listings and assets of US$1,036.1 Bn, from 108 providers on 41 exchanges.
Demand for ETFs globally has surged as professional and retail investors alike have discovered their unique combination of benefits, such as versatility, transparency and significant cost advantages. The availability of cost effective, flexible, liquid, and diversified investment products that enable rapid implementation of a comprehensive range of investment strategies has struck a chord with investors – during both bull and bear markets.
Factors driving expanding use of the vehicle include the number and types of equity, fixed income, commodity and other indices covered, more fund platforms embracing ETFs, more active marketing of ETFs by online brokers, greater involvement by fee based advisors, the growing number of exchanges planning to launch new ETF trading segments, and regulatory changes in the United States, Europe and many emerging markets that allow funds to make larger allocations to ETFs.
We expect global AUM in ETFs and ETPs to increase by 20 to 30 percent annually over the next three years, taking the global ETF/ETP industry to approximately US$2 trillion in AUM by early 2012. Considering ETFs separately, AUM should reach US$2 trillion globally by the end of 2012, US$1 trillion in the United States in 2011 and US$500 billion in Europe in 2013.
Source: Global ETF Research & Implementation Strategy Team, BlackRock
95 New ETFs Launched in 2010 Based on Standard & Poor's Indices
Represents 46% Increase Over 2009; ETFs Listed Outside the U.S. Comprise Over Half the Growth
January 29, 2011--Standard & Poor's, the world's leading index provider, announced today that its ETF licensing business experienced exceptional growth in 2010, as 95 ETFs based upon its family of stock market indices were launched in 2010 - the biggest annual total in Standard & Poor's history - raising the number of ETFs linked to S&P Indices to 301.
2010 was characterized by unprecedented growth in S&P Indices' international licensing business, with ETF launches outside of the United States outpacing those from within. Of the 95 new ETFs tracking Standard & Poor's family of indices, 57 were listed outside of the US. The greatest growth was in Europe, where 29 new ETFs were launched by product providers in 2010 - more than doubling the total for the region.
In Europe, S&P Indices licensed eight product providers (Amundi, BNP Paribas, Commerzbank, Credit Suisse, Deutsche Bank, HSBC, Lyxor, and Source) to launch ETFs based on the S&P 500 providing greater access to the U.S. equity market.
In the U.S., S&P Indices and Vanguard finalized an agreement that has so far resulted in 10 new ETFs for U.S. domestic investors. Additionally, S&P Indices entered into an agreement with SSgA that transitioned seven of their existing ETFs, including their style series, to S&P benchmarks.
S&P Indices also expanded its footprint in Asia Pacific, highlighted by a landmark licensing agreement with Bosera Asset Management for an S&P 500 ETF in China. In addition, S&P Indices relocated its head of ETF licensing to Asia in an effort to catalyze additional growth in the region.
For its efforts in index development, S&P Indices was recognized with several industry awards in 2010 including:
•Most Innovative Index Provider of the Year: Structured Products Americas Awards 2010
Most Innovative Index Provider of the Year: Structured Products Europe Awards 2010
Best Local Provider of Indices: AsianInvestor in their 2010 Service Provider Awards
Best Index Provider of the Year: Asia Asset Management Awards 2010
"Our ETF licensing business is well positioned to contribute to S&P Indices' growth in 2011 as our reach becomes increasingly global and investors allocate more of their assets to ETFs," says Alexander Matturri, Executive Managing Director at S&P Indices. "We believe 2011 will bring further growth in ETF development throughout the world and across a variety of asset classes including equity, fixed income and commodities where we are already well positioned with leading index products and services."
For more information about S&P Indices, please visit: www.standardandpoors.com/indices.
Source: S&P Indices
Inequality: The Haves and Have-nots
January 28, 2011--To the young and ambitious in the world, Branko Milanovic has a sober message: your income and global status mostly aren’t in your control.
In fact, more than 80% of your likely income is determined at birth by your citizenship and the income class of your parents, says Milanovic, an economist at the World Bank’s Development Research Group.
With intelligence, hard work and luck, you can move up in your country’s income distribution, but it may do little to improve your ranking among the almost 7 billion people in the world unless your country, too, forges ahead. Sometimes, if constrained by access to education and income mobility, you can’t even pull ahead in your own country.
That, in a nutshell, is the story behind global inequality. And, at a time when the incomes of the world’s top 1.75% earners exceed those of the bottom 77%, it raises all sorts of questions, such as the role of development, international migration and the global equality of opportunity, says Milanovic, one of the world’s leading experts on inequality.
We need to realize how important it is to have high growth in poor countries, particularly in Africa," he says. "Because if your country is doing well, you are put in a faster lane. If your country goes backward, you can run, but you won’t move forward globally. And that assumes that institutions in your country do allow for some upward mobility. Unfortunately, as we know, in many countries they do not."
Source: World Bank
